Workers' Participation in Management

Everything you need to know about workers’ participation in management. Workers participation in management indicates involvement of workers in managerial decision making process of the organization.

Workers participate in decision making through their group representative. The nature and extent of workers participation in management depends upon the nature of the organization, nature of different problems that requires settlement.

This is the new concept in industrial relations to bring industrial democracy to the industry. It can be said that the arrangement which is designed to involve employees in the important decision making within the workplace at different levels.

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ILO – Workers’ participation, may broadly be taken to cover all terms of association of workers and their representatives with the decision making process, ranging from exchange of information, consultations, decisions and negotiations, to more institutionalized forms such as – the presence of workers’ members on boards of management or supervisory or even management by workers themselves (as practised in Yugoslavia).

Learn about the meaning, definition, concept, features, methods and limitation of workers’ participation in management.

Workers’ Participation in Management: Meaning, Definition and Concept and Methods

Workers’ Participation in Management (With Limitations)

Workers participation in management indicates involvement of workers in managerial decision making process of the organization. Workers participate in decision making through their group representative. The nature and extent of workers participation in management depends upon the nature of the organization, nature of different problems that requires settlement.

Sharing of information with the workers relating sales, production, profit and other financial matters, introduction of new technology, by the management denotes informative participation where the workers have no role in the managerial decision making.

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Consultative Participation provides an opportunity to the workers, through the work groups to express their views, opinion and recommendation on matters such as – employee benefits, employee welfare and work conditions to the management.

Associative Participation puts the management under a moral obligation to acknowledge, accept and implement the unanimous decision of the workers group, thereby offering the employee’s group a greater role to play.

Administrative Participation offers a greater degree of authority, responsibility and decision making power to the workers where the worker’s group is given certain alternatives from which they can select the one to be implemented.

In case of Decisive Participation decisions are taken jointly with mutual consent and both the parties are obliged to abide by them.

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Worker’s participation in management is based on mutual trust, information sharing and mutual problem solving.

According to Keith Davis, “Workers’ participation is the mental and emotional involvement of a person in a group situation which encourages him to contribute to group goals and share in responsibility of achieving them”.

According to Dr. V. G. Mehtras worker’s participation in management involves “sharing the decision-making power by the rank and file of an industrial organisation through proper representation at all the appropriate levels of management in the entire range of managerial action”. Workers participation in management is appreciated as it aims to bring about economic, social and psychological enhancement of workers. It also improves organizational productivity.

Limitations of Worker’s Participation in Managemenat:

The success of worker’s participation in management depends upon the interest of both the parties involved.

The success of worker’s participation in management is limited due to the following factors:

1. Limited knowledge and education – Often the knowledge and education of workers are limited to the area of their specialization of work. They lack knowledge in managerial operations to participate in management.

2. Domination and bossism – Domination and bossism of management group holds back the success and effectiveness of workers participation in management.

3. Conflict of interest – Conflict of interest between the employee’s group and employer’s group affects the effectiveness of workers participation in management.

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4. Weakness of trade union – Most of the time trade unions are not strong enough to participate in management and express their views and opinion because they lack finance, specialized knowledge. Conflict of interest between different trade union groups, domination of political parties hampers the effectiveness of workers participation in management.

Workers’ Participation in Management: Concept

The concept of participation is expressed by different experts in different ways. The term participation is also variously understood by involved parties. The parties involved in the participation are workers, management and government. For management it is a joint consultation over the particular issue prior to decision making, for workers it means co-determination, while for government it is an association of labour with management without the final authority or responsibility in decision making.

The concept of worker participation was introduced with the interest to bring forward or involve the non-managerial employees in their related issued so that their opposition can be avoided cooperation. This is the new concept in industrial relations to bring industrial democracy to the industry. It can be said that the arrangement which is designed to involve employees in the important decision making within the workplace at different levels.

Workers’ participation in management in decision making is an essential ingredient of industrial democracy. The concept is designed to give human touch to management activities which brought about a new set of values to labour and management. Traditionally the concept of Workers’ Participation in Management (WPM) refers to participation of non-managerial employees in the decision making process of the organisation.

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It is known by different names in different countries. Workers’ participation is also known as – ‘labour participation’ or ’employee participation’ in management. In Germany it is known as co-determination while in Yugoslavia it is known as self-management. The involvement of workers in the decision making process has been termed variously as industrial democracy, employee participation, participatory management and workers’ participation in management.

The International Labour organisation has been encouraging member nations to promote the scheme of Workers’ Participation in Management. Workers’ participation in management implies mental and emotional involvement of workers in the management of Enterprise. It is considered as a technique or mechanism where workers have a lot of things to discuss or say in the decision making.

This serves to create a sense of belonging among the workers as well conducive environment in which both the workers would voluntarily contribute to healthy industrial relations.

Workers’ Participation in Management – Meaning and Definitions Propounded by Leading Experts and Institutions

Over a period of time various experts have contributed to the concept of workers participation in management.

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Some of the leading experts’ meaning and definitions are given below:

International Institute of Labour Studies defined, “workers participation in management is the participation resulting from the practices which increase the scope for employees’ share of influence in decision making at different tiers of organisational hierarchy with related assumption of responsibility”.

The main implications of workers’ participation in management as summarized by ILO – Workers have ideas which can be useful; Workers may work more intelligently if they are informed about the reasons for and the intention of decisions that are taken in a participative atmosphere.

McGregor (1960) contends that, “worker participation consists basically in creating opportunity under suitable conditions for people to influence decisions which affect them It is a special case of delegation in which the subordinate gain greater control, greater freedom of choice with respect to bridging the communication gap between the management and the workers. This serves to create a sense of belonging among the workers as well conducive environment in which both the workers would voluntarily contribute to healthy industrial relations”.

Easton (1995) defined, “whatever term is used, workers’ participation in management decision making is a system of communication and consultation, either formal or informal, by which employees of an organisation are kept informed about the affairs of an undertaking and through which they express their opinion and contribute to management decisions”.

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According to Walpole, participation in management gives the worker a sense of importance, pride and accomplishment; it gives him the freedom of opportunity for self-expression; a feeling of belongingness with the place of work and a sense of workmanship and creativity.

Mamoria (1997) define the term of workers’ participation in management decision making by the workers as – “it is a distribution of social power in industry so that intends to be shared among all those who are engaged in the work rather than getting concentrated in the hands of a minority”.

According to Robbins the participative management is a part of the broader concept of employee involvement. Employee involvement is defined as a participative process that uses the entire capacity of employees and is designed to encourage increased commitment to the organisational success. However, participative management is a technique of joint decision making; that is, subordinates actually share a significant degree of decision making power with their immediate superiors.

Potvin (1997) defined the concept of workers’ participation in management decision making, “means sharing in the decision making power by the rank and file of an industrial organisation through proper representatives, at all levels of management, in the entire range of managerial action”.

According To Gdh Cole “Better participation and greater responsibility in the decision making process on the part of workers tend to develop their organisation loyalty, confidence, trust, a favorable attitude towards supervising and a sense of involvement in organisation”.

According to U.P. Michael, “participation means the identification with involvement in the day to day functioning for the achievement of the goals of the organisation taking into account the reality of the situation which enables the workers to undertake the responsibilities”.

Workers’ Participation in Management – Explained by V.C.Mhetras

Participation is a sort of involvement of individual in group activities to contribute to group goals. In organizational context, participation refers to involvement of employees as representatives of the employees’ community in the decision making process of the management. Stevens (1990) believes that ‘participation is about employees playing a greater part in the decision making process’.

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The concept of workers’ participation in management is a sort of industrial democracy which gives the rights to the employees’ representatives to participate in decision making process. The term ‘participation’ is also extended to forms of financial participation such as profit sharing.

V.C. Mhetras (1966) has suggested five levels of participation in decision making viz.:

(i) Information participation that refers to sharing information in respect of sales programme, balance sheet, production, economic conditions of the firm etc. Here the workers have no right to scrutinize the information provided.

(ii) Consultative participation that refers to sharing of views on such matters as working conditions, welfare programme, work and safety methods etc. Here, the joint council works as an advisory body. Management may or may not accept suggestions and final decision is taken by the management.

(iii) Associative participation. In such case, management accepts and implements the unanimous decision of the council.

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(iv) Administrative participation. Here, the degree of sharing authority and responsibility of administrative work is much more than in other cases.

(v) Decisive participation. Here, decisions are taken jointly on matters relating to production, safety, welfare etc. This is the highest form of participative activities.

In case workers are associated in the decision-making process, it gives them a great psychic satisfaction besides other advantages of WPM. Their ego is satisfied to a great extent, and they feel involved in the affairs of their organisation and start giving their best to the organisation.

Besides, WPM is a big leap towards realisation of the concept of industrial democracy which is instrumental in establishing industrial peace and enabling an organisation to achieve its objectives.

The emerging changes in the working world point to the gradual transition from muscle to mind and brawn to brain in terms of human skills and their utilisation at the workplace. This emphasises the need for the management belief, initiative and commitment to management through joint consultation and cooperation. It is here that workers’ participation comes into vogue.

However, voluntary measures are more effective than those imposed through legislation and so on. In individual enterprises, depending upon management philosophy and the extent of interest and initiative that a management takes, there is no dearth of new initiatives for promoting and facilitating consultation and cooperation at the shop floor and enterprise levels.

Workers’ Participation in Management – Meaning, Concept and Origin of WPM

The origin of the concept of WPM can be traced back to the writings of Fabian socialists headed by Sydney Webb who highlighted the economic and social disorders of industrially developing countries and stressed the need for unity and cooperation among partners of production.

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The origin and growth of political democracy in many parts of the world was another factor for giving a boost to the concept of WPM. Since political democracy and economic industrial democracies go along, it was argued that just as in political democracy people have the right to choose their government, the workers should also have the right to affect the managerial decisions (i.e., industrial democracy).

It was Mahatma Gandhi who initiated the idea of WPM in our country through his concept of trusteeship. The concept received further impetus from the First World War and the Second World War when in the quest of industrial peace, some countries recommended to establish joint committees/bodies.

The three recommendations of the ILO adopted in 1952, 1960 and 1976 further encouraged the process of consultation with the workers and recommended the establishment of tripartite machinery for consultation. With the passage of time, the idea of WPM got institutionalised in many countries, though the term of WPM varies from country to country depending on its economic, political and social circumstances.

In India, the concept got further impetus through an amendment to the Constitution of India, providing for WPM and including it as a Directive Principle of State Policy (Article 43A). The enactment of the right to information in 2005 was another milestone in oiling the process of WPM.

However, ‘participation’ as it is understood today has been fraught with multiple meanings and, therefore, it has acquired different meanings for different people defining it as per their own convenience. For example, while workers regard WPM as a co-decision and right of co-determination, management interprets it as joint consultation prior to decision-making.

To some, WPM is the method through which workers are able to collectively express their views on the functions of the enterprise. To others, WPM is sharing of power and authority between the workers and the management.

However, the underlying point in all opinions being sharing the decision-making power with the workers in an organisation in an appropriate manner, that is, to eke out a say of the workers in the decision-making process. Thus, WPM is a movement from decision-taking to decision-making.

Workers’ Participation in Management – Meaning of WPM from Economic, Psychological and Social Point of View

The Word ‘participation’ means to take part or to involve in any activity or event. This brings the attitudinal change and increases the motivation level of human towards activities or event where he is participating.

The term ‘Workers’ Participation in Management’ refers to involvement of workers in activities long considered to be the prerogatives of management for the simple reason that workers were not groomed for assuming managerial functions.

Decision-making is the essence of management. Participation in management would imply involvement of workers in the process of decision-making. It amounts to extending the sphere of workers’ influence. In the words of Reilley it refers to “any agreed process established within an organization through which employees are able to affect managerial decisions”.

The term ‘participation’ is usually applied to “the subordinates’ greater influence over matters within the sphere of his superior’s responsibilities”. These definitions make it abundantly clear that participation requires involvement of workers in decision-making which traditionally does not fall within the scope of their activities and authority.

Participation is thus a new venture breaking the traditional practices and status consciousness. It recognizes the dormant potential in workers which, if used wisely, would minimize occurrence of industrial conflicts and it is recognition of the democratic spirit swaying the employees the world over.

According to the views of social thinkers Comte and Owen, workers’ participation in management should be encouraged for achieving social justice. On the other hand, from the view of social scientists it is best technique for the utilisation of human approach. The experiments of Blake, Mayo, Lewin and Likert believe that if workers are given opportunities to participate in the decision making process of the management, there could be possibility of positive gains to the organisation’s effectiveness and moral of the workers.

WPM facilitates the achievement of above objectives by providing challenging assignments to workers, increasing their responsibility consciousness, increasing the relevance of their work, permitting them to have a say in management decisions, improving employer- employee communication, and also worker-supervisor relationship.

Workers’ Participation Management – Economic, Psychological and Social Point of View:

1. Economic Point of View – Employees can contribute substantially to the progress and prosperity of the organisation. They, therefore, have a legitimate right to share equally the gains of higher production.

2. Psychological Point of View – It recognises non-economic needs of the employees, raises motivation level and gives them sense of importance, pride and accomplishment, freedom and opportunity for expressions, a sense of belonging and creativity.

3. Social Point of View – It forges ties of better understanding between individuals leading to better efforts all around. It leads to a happier society engaged in productive and meaningful activities in the larger interest of the nation.

Workers’ Participation in Management – As Explained by Popular Management Experts

Management consider participation as a joint consultation prior to decision-making while workers mean codetermination by the term ‘participation’. Government looks at ‘participation’ as an association of labour with management without the final authority or responsibility in decision-making.

But, generally conceived, it means a way of reducing power difference and, therefore, equality is stressed. Frankly speaking, this idea of reduction of power inequality, between management and labour through workers’ participation cannot be accepted since there is the obvious difference in formal power position between the labourer and the director.

However, certain elements of participation are very much clear though the more precise conceptual properties of participation are not so clear. The elements are – the amount of verbal interaction between a supervisor and his subordinates, the extent to which a supervisor performs his role in a group-centred way and the degree to which a supervisor is active in making decisions and setting goals for his work units.

Whatever might be the interpretations of the term participation, the fact remains that, it means sharing, in an appropriate manner, the decision-making power with the lower ranks of the organisation.

The nomenclatures of the participations indicate their nature. “Participation has been termed as one of the most prominent constructs in group dynamics literature. Several empirical findings conducted in the laboratory and otherwise show that significant changes in human behaviour can be brought about rapidly only if the persons who are expected to change, participate in deciding what the change shall be and how it shall be made” (Monappa and Saiyadain).

As a measure to improve industrial relations, workers’ participation in management is very important. It is an attempt “to extend democracy from the political to industrial plane”. A socialist society remains a dream if the toiling masses are not associated with the management of an organisation where they work. This is definitely a very effective way of eliminating or reducing class-struggle. Involvement of workers in management is helpful in boosting their morale and discipline and thus improvement in production qualitatively and quantitatively can be ensured to a considerable extent.

By inculcating the spirit of responsibility among the workers, their participation in management goes a long way in solving various problems arising out of mutual distrust between capital and labour; thus the industrial atmosphere improves and the environment becomes congenial for the workers and the employer to breathe in an air that encourages an industrial unit to develop its health for realisation of its objectives.

Participation of the workers in the management should be ‘real’ and ‘effective’ and not merely formal. Involvement of the workers, to be effective, must be both mental and emotional. There must be a genuine intention on the part of the management to implement the decisions arrived at after consultation with the workers.

The management should not hold the reigns of controls and final decision taking powers in its own hands. In the workers’ participation scheme, the role of the workers should not be conceived as that of advisers but of active participants. It does not, however, imply that all the controls should be vested in the hands of the workers.

In a genuine participation, the workers are not simply asked to give consent to the proposals brought forward by the employers. The workers themselves will take initiative to bring forth creative ideas for the organisation to implement.

Workers’ participation in management is still distinctly experimental even in advanced countries. Skepticism and cynicism represent a major hazard to all such plans. Neither party believes in the co-operation of the other party, and, as such, the scheme is yet to attain necessary success.

Labour participation in management is a concept of “sharing of decision making power by the rank and file of an industrial organization through proper representation at all levels of management in the entire range of managerial action” (Dr. Mhetras).

In “Participative Management” by K. C. Alexander, it has been stated – “A management is participative if it gives scope to the workers to influence its decision making process on any level or sphere or if it shares with them some of its managerial prerogatives”.

The planners of Indian economy feel that “for the peaceful evolution of the economic system on a democratic basis, it is essential that workers’ participation in management should be accepted as a fundamental principle and an urgent need”.

The concept of workers’ participation is based on the principle of co-partnership in industry as opposed to master-servant relationship. Participation should mean co-functioning, playing one’s part in an integrative unity, contributing all that one is capable of to the good of the organisation. It signifies workers’ identification with the progress and development of business.

The practice of workers’ participation differs from one country to another. However, one thing is certain that “Workers’ participation is now a feasible concept and has turned into a world-wide movement”, though there are different degree and levels of workers’ participation.

The underlying ideas of workers’ participation as understood from different definition and explanations of the concept are – (1) It is a mental and emotional involvement (2) It is a two-way psychological and social relationship and (3) It is art acceptance of responsibility by workers.

As a matter of fact, participation of workers in management rests on two foundation stones – coordination and understanding through best communication. Participation is effected through several methods such as – (1) Joint consultation (2) Auto-management (3) Co-partnership (4) Workers’ representation on the Board (5) Suggestion scheme (6) Multiple management (7) Democratic supervision and (8) Consultative supervision.

Workers’ Participation in Management – (With Basic Features)

A number of definitions and concepts have evolved during the course of time explaining what constitutes “participative management” or “workers participation in management.”

N. W. Chamberlain holds, “Union-management co-operation represents joint decision-making in matters of admittedly common interests.” According to Ian Clegg, “Cooperation implies a situation where workers’ representatives are to some extent, involved in the process of management decision-making….”

According to J. R. P. French, participation refers to the “process in which two or more parties influence each other in making certain plans, policies and decisions. It is restricted to decisions that have further effects on all those making the decision and those represented by them.”

Many other definitions of “participative management” or allied terms have been offered by scholars and professionals. A potent point that need not be overlooked is that most of the definitions have been developed in particular contexts of the approaches and practices prevailing in different countries at different intervals of time, the role of the employers and unions in the area, the accepted extent and degree of participation; the state of collective bargaining and the nature and extent of state intervention in the field. Wide variations exist in all these areas.

In Yugoslavia, workers’ participation in management has three-tier structure consisting of collective, workers’ council, and board of management. The collective holds referenda and periodical meetings to know the opinions of workers on various issues. The workers’ council is an elected body by the collective and takes decisions on labour relations, discipline, productivity, remuneration, health, safety, etc.

The board of management is responsible for overall management of an enterprise and at least three-quarter of its members are from workers directly engaged in production. However, this model of workers’ participation is not universally applicable. Therefore, we can take the concept of participation as sharing the decision-making power by the workers of an organization through their representatives at all the appropriate levels of management in the entire range of managerial action.

As such, the interpretations of the concept have also varied. Despite these differences certain basic features of participative management or workers’ participation in management can be conveniently identified.

These are as follows:

(1) Participative management may be viewed as an aspect of industrial democracy involving joint consultation, deliberations and decision-making on matters of common interests in the work-situation setting.

(2) In contrast to collective bargaining, which rests on the assumption of conflicting interests of employers and workers, participative management rests on the premise of mutuality of interests of the two parties.

(3) Particular schemes of participative management may emanate from collective agreements, employer’s own unilateral policy, mutual understanding between the parties, nature and extent of governmental regulation in the field or customary practices.

(4) The nature, extent, degree and level of participation may vary from establishment to establishment, organisation to organisation and industry to industry.

(5) Sanction behind the outcome of joint deliberations also varies. In some cases, the decision is smoothly implemented, while in others the ultimate right to enforce it lies with the management.

(6) The specific areas of participation also vary from establishment to establishment, but in most arrangements these are related to work-situation conditions such as productivity, improvement in quality, reduction of waste and elimination of conflicting situations.

There is substantial strength in the statement, “In general, workers’ participation is…. an alternative method of collective bargaining. Workers’ participation in management gives workers the opportunity to voice their opinions and determine the policies and operational decisions of an enterprise or organisation.”

Workers’ Participation in Management – 4 Ways in Which Workers Participate

Generally, the word “participation” means to take part in or to involve in any activity. Worker’s participation in the management of the organisation means workers share their views in the decision-making process of the organisation. It creates good employer-employee relation in the organisation which is essential for the economic growth.

It is a process through which worker’s involve in the day-to-day functioning of the organisation for the achievement of organisational goal. By this process also workers, feel committed to their job as well as to the organisation they serve. It is like an instrument where workers gave their opinion freely in the decision-making processes of the organisation. It has a great psychological value.

Thus, employees easily participate in this process. It also increases the productive process of the organisation. According to the industrial sociologists, if there is greater identification of participating workmen with socio-economic objectives of the enterprise, the chances of higher productivity get much more real.

It is believe that full participation of worker in decision-making process is the prerequisite for effective functioning of the organisation as well as the overall productivity of the organisation.

In a democracy country like India it is a fundamental right of the worker. It places them favourable vis-a-vis management.

Generally, there are four ways in which workers participated:

1. Profit sharing

2. Consultation

3. Joint management

4. Self-management on the part of workers.

Labour management collaboration has been expressed in India’s policy and the following objectives have been articulated in the Second Five Year Plan-

i. Securing better welfare facilities for workers.

ii. Establishment of cordial relation between management and workers and building up understanding and trust between them.

iii. Substantial increase in productivity in the interest of management, workers and the nation.

iv. Training and education of workers to understand and share the responsibilities of management.